Maui Council’s FY26 budget: Final vote looms amid shifting justifications, lingering questions

The Maui County Council can be hard to pin down. Case in point: The Council’s shifting, evolving and sometimes contradictory justifications for planning to cut – then adding to – Maui County’s fiscal 2026 budget, originally proposed at $1.512 billion by Mayor Richard Bissen’s administration in March. 

The road to Tuesday’s final vote has had its twists and turns, possibly reflecting the unpredictability of a Council with a tenuous, 5-4 majority backing current leadership.

In mid-April, Council Chair Alice Lee spoke up at a Budget, Finance and Economic Development Committee meeting, suggested a cautious approach to spending, asking council members to consider potential “deep cuts” to the mayor’s budget. 

“I can’t imagine them being able to spend a billion dollars,” Lee said at the time, expressing skepticism based on experience with past performance, carryover savings and repeated budget amendments. Committee Chair Yuki Lei Sugimura agreed, saying: “We have to do some cuts to the total.” 

In late April, the pendulum of overall budget costs swung in the other direction. Instead of reducing the administration’s overall spending, the Budget Committee reported out a budget calling for overall spending that was nearly 3.7%, or $55.4 million, more than the Bissen baseline budget.

When Maui Now asked for an explanation of the additional spending, Lee said there were a number of “high priority” projects and programs that “needed to be added.” When asked, specifically, which projects were considered so important, Lee said it would be “premature” to answer that question. Council staff was busy “finalizing reports, verifying numbers, drafting needed ordinances,” etc.

Insight into various council members’ priorities can be seen in the following matrices submitted by individual members to the Budget Committee on April 21 and April 23. It should be noted that not all of the members’ proposals were adopted. Some were withdrawn or reduced as the budget made its way past first reading.

Then, on May 15, a new Council narrative emerged, introducing the specter of federal budget cuts as a factor in higher Council spending.

Lee, Sugimura and Council Member Shane Sinenci told the Hawaiʻi Journalism Initiative that they were concerned about federal budget cuts and impacts to nonprofit organizations. Then, two days later, the Council passed its budget on first reading, reducing some real property tax rates and calling for overall spending of $1.558 billion. Now the budget pending second reading has been reduced $9.4 million from the Budget Committee, but still $46 million more than the Bissen proposed budget.

Now, Council concerns about local federal cuts are set against recent developments in Washington, D.C., that could impact federal spending from the administration of President Donald Trump. On Wednesday, the New York-based US Court of International Trade stepped in and disallowed President Trump’s proclaimed “Liberation Day” tariffs, saying he exceeded his authority in doing so. Also, billionaire Tesla and SpaceX head Elon Musk has left the Trump administration, leaving his role head of the Department of Government Efficiency where he struggled to achieve his goal of cutting trillions of dollars in federal spending.

Maui Now sought clarification from the County Council and Bissen administration on the threat of federal budget cuts and their impact on the increased spending.

Both Lee and Budget Director Lesley Milner reported that Maui County has not received any official notice of impending budget cuts from the state (as a pass through for federal funding) or from the Trump administration, although impacts of actual cuts from the administration’s Department of Government Efficiency have been widely reported. 

Providing more context to federal support for Maui, Lee added that “federal agencies and partners have been invaluable in supporting the county’s ongoing wildfire recovery and broader community-resilience efforts.”

For example, Maui County has been allocated $1.6 billion in Community Development Block Grant funding for relief from the August 2023 wildfire disaster.

Milner acknowledged that “there is some uncertainty at the federal level, which the (Bissen) Administration is monitoring closely. However, it’s important to note that most County operations are funded through local sources rather than federal grants.” 

However, “the County has not been informed that any grants that have already been executed will be withdrawn,” she said. “We are in continuous communication with our funding partners to ensure we are able to respond as needed if changes are made at the federal level that will significantly impact County projects or priorities.”  

Lee cited a “variety of factors” influencing the Council’s decisions, including “uncertainty about some federal funding.” However, she broadened the scope to include the rising cost of living for residents, a slowing global economy, and ongoing challenges from the wildfire recovery.

These macro-economic currents, largely out of local government control, are now presented alongside federal concerns and public sentiment for “greater investment in local working families,” according to Lee. 

The Council’s stated aim is to “ensure families have the tools needed for resiliency while facing these challenges,” she said.

In explaining how these “tools” directly relate to the significant Council budget increases for programs like the $12 million ALICE Initiative or the $25 million county contribution to the Lipoa Apartments project, Lee said: “The tens of millions of dollars the Council has appropriated for affordable housing and the ALICE Initiative provide specific resiliency tools for residents.” 

However, she offered no direct connection between those significant increases and any impending federal budget cuts.

Milner said: “I believe that the ALICE initiative is assisting programs that have already lost federal funding… I am not aware of a federal connection to the Lipoa Apartments project.” 

The Maui United Way will implement the countywide ALICE Initiative: Kamaʻāina Credit program, to help households identified as asset limited, income constrained and employed; in other words the working poor, people who struggle often working more than one job to make ends meet. 

Recently, Maui United Way’s President and Chief Executive Officer Jason Economou told the online news site Civil Beat that he has seen the effects of federal budget cuts to other Maui nonprofits. 

Maui United Way has seen its Federal Emergency Management Agency funding held up (and unlikely to be released) for its emergency food and shelter program, Economou told the news outlet. 

Lee explained that “the budget is a compilation of estimated revenues and expenses, proposed programs, projects and operations. Community input is key in shaping this budget, but so is the input from department personnel. Many factors are taken into consideration. These factors could be federal, state and even global occurrences or policies.” 

The Council left some Maui Now questions unanswered, even after repeated requests. These included: 

• No quantification of Council budget additions directly attributable to federal concerns. 
• No list of specific County programs or grants that are supposedly at risk. Milner said: “We are not aware of specific cuts at this time and cannot speak to the intentions of the Trump Administration.” She noted that: “We are aware that the state is advocating for the restoration of funding for digital equity grants and are awaiting the outcome of those discussions.”
• No estimated magnitude of these potential cuts, making it difficult to assess the actual threat level. Milner confirmed, “The magnitude of cuts is currently unknown.” 

Regarding the county’s financial preparedness, the Council’s response did not address whether existing mechanisms, such as carry-over savings and budget amendments, could have been used to address federal cuts if and when they materialize; or why a dedicated “rainy day” or reserve fund wasn’t specifically bolstered for this purpose. 

Lee said the Maui County Charter “requires a balanced annual budget. The Council intends every year that its appropriations be executed. But circumstances change during each fiscal year, resulting in carryover/savings and mayor-proposed budget amendments. Those changed circumstances can’t be predicted before the fiscal year.” 

Milner said: “The County’s carryover savings are not a reserve fund. The County does have the Emergency Fund, which can be used for a public emergency threatening life, health, property, or economic viability of the County.” 

She added that “the mayor is committed to working with the Council during this fiscal year to establish a fiscal reserve fund in addition to the Emergency Fund.” 

Furthermore, the Council offered no comment on its confidence in the current administration’s capacity to execute all the budgeted spending or to fill the approximately 600 vacant positions funded in the County fiscal 2026 budget. 

Maui Now asked whether the County has conducted any financial “stress tests,” which are used as analytical tools to determine a government’s financial resilience and its ability to withstand economic or fiscal shocks. Such tests are recommended by organizations such as the Government Finance Officers Association. 

In response to the question about “stress tests,” Lee said: “The council isn’t aware of the county government performing a financial stress test. But county residents have been living through a series of real-life stress tests. And the Council’s budget is intended to ensure local working families have the tools to not just overcome the obstacles they face but to thrive in Maui County, irrespective of what happens in Washington or anywhere else.” 

Milner confirmed that no “stress test” has been done. 

“At this time, the County has not engaged in a ‘stress test,'” she said, adding that it would not be needed for overall County finances. 

“Two of our largest revenue sources are real property tax and general excise tax, and we do not anticipate that federal funding cuts will significantly impact these funds,” Milner said. “The next largest fund is transient accommodation tax, which is tied to tourism. Again, we do not feel that federal funding cuts would have a direct impact on these funds. These funds were significantly impacted after the wildfires of 2023 and the County was able to absorb the decrease and maintain services and strong financial conditions.” 

Lee commended Council members and staff of the Office of Council Services and County Clerk for “their hard work and collaboration on producing an excellent budget, especially during these uncertain times.” 

“Like all local governments, Maui County is in limbo as threatened and intended federal cuts are pending in litigation or legislation,” she said. “The very nature of this uncertain status means we don’t have specifics.”

Second reading of the Maui County budget is at 9 a.m. Tuesday in the Council Chambers. The budget is set to go into effect July 1.

Editor’s note: This story has been updated to correct the amount of Mayor Richard Bissen’s original proposed budget amount — $1.512 billion.